Currently, the exchange rate of naira is about N398 to a dollar as the oil price continues to dwindle to $20 range. Nigeria is in a serious state of economic recession. President Buhari is not ready to devalue the naira, even when the currency has naturally lost its value.
The noise about diversifying the country’s economy did not start now, reports show that the regime of ex-president Olusegun Obasanjo actually started the campaign, which was not effectively implemented.
Oil price was about $12 per barrel when Obasanjo assumed office in 1999 and it could be remembered that his ultimate policy was to diversify the economy to run the government.
The successive governments, including the immediate past regime of ex-president Goodluck Jonathan failed to implement economic diversification due to sudden rise in oil price to over $100.
There are no indicators that the price of oil will rise before 2017 and this of course might help the government to intensify its effort in growing other sectors of the economy, which include agriculture, mining and manufacturing.
Minister of Solid Minerals Development, Dr. Kayode Fayemi said that the Federal Government would revoke licenses of miners who had acquired mining sites but had failed to commence work.
He also said that the ministry would formalize illegal mining to ensure that the operators are regulated and taxed. He disclosed how precious elements, including gold were being smuggled out of the country without records of tax and revenues.
All these loopholes, according to him would be blocked to enhance the economy as the present government is bent on developing other areas of the economic sectors.
Consider this: 10 years ago, a ton of cocoa beans cost $1,571. Right now it costs double that, $3,244, according to the International Cocoa Organization.
The rising price of cocoa suggests a potential economic prosperity for a country like Nigeria, which at a time was the largest producer of the beans.
And with the rising demand for chocolate in developed countries, there is great hope for Nigeria if government can invest in agriculture and largely on cocoa.
Besides the Aliko Dangote’s venture in rice farming, which of course will provide employment for teeming population of Nigerian youths, the founder of Kingsway International Christian Centre, Pastor Matthew Ashimolowo actually has over 500 acres of rice farm land in Ofada, Obafemi Owode Local Government of Ogun State, South-West Nigeria.
But the new policy, no doubt will spell doom for many importers who depend largely on the strength of the naira to do international transaction. And one of the options for these sets of traders is to also diversify their businesses or remodel their trades.
With the ovation on “Made in Nigeria” product becoming louder, led by Senator Ben Murray Bruce from Bayelsa East, most Nigerians might be forced to patronize Nigerian products to grow the naira.
Of course, the manufacturing industries are to gain from this policy, it does not mean that they would not import some of their raw materials, which invariably is a matter of exchange rate.
It must be recalled however, that past regional governments grew the country’s economy with agricultural products of cocoa, cotton, palm oil, hide and skin. Here, one could suggest that the government should improve the value of cocoa by actually establishing more chocolate manufacturing plants for local consumption and exportation.